Progress Report 2011 the LEGO Group
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The LEGO Group Aastvej 7190 Billund Denmark Tel.: +45 79 50 60 70 Progress Report 2011 www.LEGO.com The LEGO Group Annual Report In the Annual Report you will find detailed information on the LEGO Group’s financial results for 2011. http://aboutus.lego.com Section GRI (Profile / Performance Indicator) GC (principle no.) Governance Good governance in a family-owned company 2.3, 2.6, 4.1, 4.2, 4.9 Board of Directors 2.3, 4.1, 4.2, 4.3, 4.7, 4.9, 4.10 Business integrity training SO3 Corporate Management 2.3, 4.1, 4.2, 4.6, 4.9 Creating value with four promises 4.8 Policies 4.9 Whistle Blower 4.4 10 The LEGO Foundation EC1 Related Foundations 4.16, EC10 Care for Children in Need 4.16, EC10 Care for Education 4.16, EC10 Care for LEGO Local Communities 4.16, EC10 Capital of Children SO1 Performance data 2.8, 4.16, EN1, EN4, EN8, EN22, HR2, LA1, LA7, PR2, 1-6, 8, 10 PR5, PR8 EC1, EC10 Notes to performance data 2.5, LA1, LA13 Definitions and calculation methods Assurance statement 3.13 GRI and Global Compact overview and index 3.12 Progress Report 2011 The LEGO Group Welcome to Progress Report 2011 This Progress Report 2011 and the Annual Report 2011 constitute the reporting commitments of the LEGO Group in 2011. The purpose of the Progress Report 2011 is to provide our stakeholders with a fair and balanced picture of our sustainability efforts in 2011. The report provides an overview of our activities, practices, goals and results. The Progress Report 2011 also serves as our annual communication on progress in sustainability, as required by the United Nations Global Compact. The report is the statutory statement on Corporate Social Responsibility according to section 99a of the Danish Financial State- ments Act. The report is developed in accordance with the main reporting prin- ciples of the Sustainability Reporting Guidelines from the Global Re- porting Initiative (GRI). And we are inspired by the voluntary standard AA1000 Accountability Principles drawn up by the Institute of Social and Ethical Accountability (AccountAbility). The basis of the report, the scope, and the materiality determination are all based on a dialogue with main stakeholders about issues that are material to them. For the 2011 report, we have applied the same model as we have used during the last three years for selecting sustainability content. Read more about this at http://aboutus.lego.com/sustainability 4 Table of contents SETTING THE SCENE 04 Welcome to Progress Report 2011 05 Table of contents 06 2011 highlights 08 Sustainability – the LEGO way 09 Message from the CEO OUR MATERIAL PROGRESS 2011 10 Our sustainability issues 12 Sustainable play 18 Environment 22 Climate 26 Employees 32 Stakeholder dialogue 36 Human Rights 39 Governance OUR 2011 NUMBErs AND SUPPORTING INFORMATION 41 The LEGO Foundation 45 2011 numbers and comments 49 Assurance statement and GRI Progress Report 2011 is published for the LEGO Design: Operate A/S LEGO, the LEGO logo, the Brick configuration Group by Corporate Affairs and Operate A/S and the Minifigure are trademarks of the LEGO Print: KLS Grafisk Hus A/S Group. © 2012 The LEGO Group. Editor in chief: Charlotte Simonsen, Senior Director, Corporate Communication, Paper: Scandia 2000 and Gallerie Art Silk. Net Promoter, NPS and Net Promoter Score [email protected] Copies: 5,000 are trademarks of Satmetrix Systems Inc, Bain & Company and Fred Reichheld. Contributor: Operate A/S The collective CO² emission of 5,000 copies is 0.7 tonnes, which will be compensated according LEGO A/S to the UN Convention. Currently, the compensa- Aastvej 1 tion goes to a wind farm in India. DK-7190 Billund, Denmark Telephone: +45 79 50 60 70 Read more about our sustainability work here: CVR-no: 54 56 25 19 http://aboutus.lego.com/sustainability No. 001 Residence: Billund KLIMA-NEUTRAL Reporting year: 1 January – 31 December 2011 TRYKSAG 5 Recycled waste as percentage of total Product registered waste recalls0 88 85 0 Target Result Target 2011 2011 2012 Our recycled waste percentage shows the recycled quantities of waste compared to total quantities of waste. In 2011, the LEGO Group once again reached its target of 0 product recalls. We calculate product recalls as launched products recalled from the market due to product safety issues. Product recalls are calculated per stock keeping unit. Injury rate 2.0 2.1 1.8 Target 2011 Result 2011 Target 2012 We calculate the injury rate as the number of occupational injuries per million hours that result in at least one day’s absence following the day of the injury. 2011 highlights Building on the success of previous years, we set our- waste we recycle. In 2011, we recycled 88% of the total selves a series of ambitious targets for 2011. We have waste, compared to our target of 85%. made progress, but there are also targets we did not meet. A high degree of energy efficiency is important for us as it makes good sense for the climate, the environ- Because the safety of children is our primary concern, ment and the bottom line. We have made great strides we have a goal of zero product recalls. All parts of the in previous years and despite improving energy effi- LEGO Group are focused on this goal, and we are ciency by a further 2.4%, we did not meet our ambitious proud to have reached it again in 2011. target of 5% in 2011. Maintaining improvements at the same rate has been difficult and is expected to remain We have an ambitious vision of reducing the amount so. As a consequence, we have reduced our target for of waste we produce and increasing the amount of 2012 to 2.5%. 6 Consumer complaint call rate 800 700 The consumer complaint 600 call rate is the number 500 of consumer complaints received relating to 400 products launched 300 in 2011 as a parts per 200 million (ppm) of the 100 number of products sold 0 in the launch year. Target Result Target Female directors+ promotions Sick leave 3.0 30 2.5 2.0 Sick leave is the number 23 1.5 of hours lost due to 1.0 the employees’ own illness calculated as a 0 0.5 percentage of the total Target Result Target 0.0 hours worked. 2011 2011 2012 Target Result Target We did not reach our target of ensuring that at least 30% of promotions to top Energy efficiency improvement management levels went to females. 5 4 We set a high target 3 for 2011. We calculate the energy efficiency 2 improvement as the rate between energy 1 consumption and raw 0 materials used. Target Result Target We have been working for years towards our 2015 tar- factor in reaching our goals. We are working to ensure get to be among the top ten companies for employee diversity in many dimensions, but failed to meet our health and safety. In 2011 we achieved an all-time low target for the percentage of females promoted to di- injury rate of 2.1, but just missed our ambitious target rector levels and above. of 2.0. Moreover, we have seen a considerable fall in the number of hours that employees are absent because of illness, well within our target. Motivation and commitment among LEGO employees Read more at was again at a very high level in 2011, which is a key http://aboutus.LEGO.com/sustainability 7 Sustainability - the LEGO way It is deeply embedded in the values of the LEGO When we defined the sustainability agenda in late Group to leave a positive impact on our surroundings. 2009, we found it important to also define a few, fo- We are in the business of play and our vision is to cussed overall targets primarily with the purpose of invent the future of play. Children are our role mod- setting the direction for the organisation. els. They reinvent the world and themselves in it over and over again, surprising themselves and others by what they can create and do. We want to leave them a future that will enable them to achieve their full hu- Our overall targets man potential. Since our foundation, we have been working con- 0 product recalls sciously and deliberately with sustainability, signing the UN Global Compact in 2003 and striving to ad- Top 10 on employee health and safety dress its ten principles. In 2006 we issued our first sustainability report and have since tracked our pro- Support learning for 101 million children gress every year. Our efforts in the area of sustainability follow on from Minimum 100% renewable energy the way we run our business – ‘The LEGO way’, where only the best is good enough. In 2009 we made four 0 waste main promises to our stakeholders. These set the di- rection for everything we do, also when it comes® to our sustainabilityThe efforts. LEGO Brand Framework By delivering on our promises we are well on our way You can read more about our targets at to achieving our vision of ‘Inventing the future of play’. http://aboutus.LEGO.com/sustainability The four promises are defined as part of our LEGO® Brand Framework: Mission Inspire and develop the builders of tomorrow Vision Inventing the future of play Play Promise Partner Promise Joy of building. Pride of creation Mutual value creation Promises Planet Promise People Promise Positive impact Succeed together Spirit Only the best is good enough Values Imagination - Creativity - Fun Learning - Caring - Quality A1_plast_posters.indd 1 12/03/10 13.33 8 Message from the CEO The LEGO Group achieved a As with everything we do, our sustainability ambitions record-breaking profit for 2011.